U.S. patent office shelves fast track plan

SAN JOSE, Calif. – The U.S. patent office has indefinitely postponed a plan to create a new fast track program, claiming a lack of funds to hire the examiners it needs to implement it.

The move may be an attempt to put political pressure on Congress to pass a draft patent reform bill that in its current form would give the agency the authority to set and keep all its own fees. Currently the agency operates on a fixed annual budget and turns over to the government's general fund fees it generates beyond that set budget.

The agency said in early April it would launch on May 4 a pilot program to process patent applications in 12 months for an extra fee. The program initially would have been limited to the first 10,000 applications filed before the end of September.

The agency announced the concept of a three-track patent system including the Track One accelerated path last June. It was perhaps the most high profile effort of David Kappos, a former IBM intellectual property lawyer named by the Obama Administration in August 2009 to run the patent office.

For the last several years Congress has put a temporary provision in regular annual budget bills to let the agency keep the fees it generates for that budget year. However the controversial Full-Year Continuing Appropriations Act of 2011 recently passed by Congress did not include that provision.

In the current fiscal year the agency asked for a budget of $2.32 billion, but got a budget of $2.09 billion. The agency expects to collect $75 to $100 million in fees beyond its budget, but will have to turn over those fees to the general fund this year.

The agency expected to hire "a couple hundred" new patent examiners to help run the new fast track program. A spokesman said the agency now has no specific time frame for when it will launch the program except "as soon as budget allows." The new fiscal year begins in October.

“Without the resources to hire a sufficient number of
examiners to implement Track One, we must postpone the effective date of the
program until we are in a position to implement it successfully while ensuring
there will be no adverse impact on non-prioritized examination applications,” said
Kappos in a press statement.

"Taking away PTO funds will just deepen the multi-year
backlog," said Steve Perlman a serial entrepreneur in San Francisco who
once waited eight years for a key patent. "Startups and individual
inventors will be hit far worse than large companies, since they have the least
resources to wait for patents delayed for five years or more," he said.

"Startups and invention are core to America's economic
future, and we are utterly stifling them," Perlman added.

"It's understandable that the USPTO had to postpone
implementation of the Track One initiative given the refusal of Congress to
adequately fund the Patent Office," said Gene Quinn, a patent attorney who runs the
IP Watchdog blog.

"We all know that the backlog of patent applications is
a real impediment to job creation by high-tech startup companies, and Track One
which was going to be a particularly attractive avenue for those companies most
in need of patents to attract funding from investors, to expand, grow and
hire," he said.

"At a time when unemployment is so high I cease to
understand why Congress refuses to allow the Patent Office to keep the user
fees it collects and invest those into operating an agency that functions for
its intended purpose; namely to issue patents and promote innovation,"
Quinn added.

The Senate passed in March a draft patent reform bill that gives the agency the right to set and keep all its fees. Kappos and other members of the Obama Administration have lobbied hard for the bill.

A similar version of the bill was recently sent for debate to the House of Representatives. If the House passes the bill, differences between the two versions would still have to be reconciled in committee before a final bill would be sent to President Obama to be signed into law.

Provisions in the draft bill to let the patent office set
and keep all its fees are among the few measures in the multifaceted
legislation that has broad backing from all sides of the patent-reform
debate.